Principle Of Finance MCQs
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| Principle Of Finance MCQs |
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1. Which of the following is NOT one of the six principles of finance?
a) Time Value of Money
b) Risk and Return
c) Diversification
d) Supply and Demand{alertInfo}
Answer: d) Supply and Demand{alertSuccess}
2. What is the principle that states that a dollar received in the future is worth less than a dollar received today?
a) Time Value of Money
b) Risk and Return
c) Diversification
d) Inflation{alertInfo}
Answer: a) Time Value of Money{alertSuccess}
3. What is the principle that states that higher returns come with higher risk?
a) Time Value of Money
b) Risk and Return
c) Diversification
d) Inflation{alertInfo}
Answer: b) Risk and Return{alertSuccess}
4. What is the principle that states that spreading investments across different assets can reduce risk?
a) Time Value of Money
b) Risk and Return
c) Diversification
d) Inflation{alertInfo}
Answer: c) Diversification{alertSuccess}
5. What is the principle that states that inflation reduces the purchasing power of money over time?
a) Time Value of Money
b) Risk and Return
c) Diversification
d) Inflation{alertInfo}
Answer: d) Inflation{alertSuccess}
6. What is the principle that states that the market price of a security reflects all available information?
a) Efficient Market Hypothesis
b) Capital Asset Pricing Model
c) Black-Scholes Model
d) Modigliani-Miller Theorem{alertInfo}
Answer: a) Efficient Market Hypothesis{alertSuccess}
7. What is the principle that explains the relationship between risk and expected return?
a) Efficient Market Hypothesis
b) Capital Asset Pricing Model
c) Black-Scholes Model
d) Modigliani-Miller Theorem{alertInfo}
Answer: b) Capital Asset Pricing Model{alertSuccess}
8. What is the principle that is used to value stock options?
a) Efficient Market Hypothesis
b) Capital Asset Pricing Model
c) Black-Scholes Model
d) Modigliani-Miller Theorem{alertInfo}
Answer: c) Black-Scholes Model{alertSuccess}
9. What is the principle that states that the value of a firm is not affected by its financing decisions?
a) Efficient Market Hypothesis
b) Capital Asset Pricing Model
c) Black-Scholes Model
d) Modigliani-Miller Theorem{alertInfo}
Answer: d) Modigliani-Miller Theorem{alertSuccess}
10. Which of the following is a type of financial asset?
a) Stocks
b) Bonds
c) Real Estate
d) Cars{alertInfo}
Answer: a, b & c{alertSuccess}
11. Following is/are a type of debt security?
a) Stocks
b) Mutual Funds
c) ETFs
d) Bonds{alertInfo}
Answer: d) Bonds{alertSuccess}
12. Which of the following is a type of equity security?
a) Bonds
b) Options
c) Mutual Funds
d) Stocks{alertInfo}
Answer: d) Stocks{alertSuccess}
13. Which of the following is a type of mutual fund?
a) Bonds
b) Stocks
c) ETFs
d) Index Funds{alertInfo}
Answer: d) Index Funds{alertSuccess}
14. Which of the following is NOT a type of investment risk?
a) Interest Rate Risk
b) Market Risk
c) Credit Risk
d) Inflation Risk{alertInfo}
Answer: d) Inflation Risk{alertSuccess}
15. What type of risk is associated with changes in interest rates?
a) Interest Rate Risk
b) Market Risk
c) Credit Risk
d) Inflation Risk{alertInfo}
Answer: a) Interest Rate Risk{alertSuccess}